Tips to help with your taxes in 2021

Tips to help with your taxes in 2021

Prepare to file your taxes in 2021 with these in mind!

Many businesses and families went through unexpected changes in 2020. The effects of the pandemic upended financial plans, forecasts, family plans, business goals and much more. This undoubtedly will have an impact when filing your 2020 taxes due to changes in the tax code for 2021. With COVID-19 came stimulus checks, programs like the Paycheck Protection Program (PPP), Pandemic Unemployment Assistance (PUA) and more depending on your business or personal need. We’ve been assisting businesses and families with their accounting and tax needs through the pandemic and will provide you with some tips to prepare you for filing your taxes this year. 

Organize Records and Documents 

For many, the main hurdle is getting documentation together. It’s important to have all your documentation in order to have a seamless filing experience. Keep all the tax documents that start coming in the mail early January in a folder and do not throw out any tax document that may look irrelevant. Many tax documents can also be downloaded online depending on the provider of the documents in case you can’t locate them. For example, many financial institutions provide tax documentation that can be viewed and downloaded when you access your account. 

Review and Itemize Transactions for your Business

Whether you are self-employed, have a side business or own a home, you’ll need to ensure your transactions are correctly documented to claim certain deductions. The pandemic led to many working from home and you may be entitled to write-offs as a result. If you use a software like QuickBooks or use a spreadsheet for your records, take the time to review the transactions and put them in their respective categories. This will help your tax preparation process greatly. The benefits of having an accountant who assists with monthly bookkeeping is advantageous, as the monthly management of your books throughout the year keeps your transactions correctly labeled. This prepares you better for tax season and makes things easier for you and whoever is assisting with filing your taxes.

Note Life-Changing Events

Many life-changing events happen year over year, but have been commonly happening since the beginning of the pandemic. Changes like getting married, getting a divorce, a death in the family or retirement may qualify you for tax breaks. Your accountant or tax preparer should be aware of any life-changing event so they can help determine which tax breaks you qualify for based on how your circumstances changed in 2020. 

Here are a few things to consider to help prepare for filing your 2020 taxes. Having an experienced tax preparation service can be helpful due to the changes in the tax code. Finding the right tax forms or knowing what to fill out due to the changes caused by the pandemic can be confusing. It’s advisable in these uncertain times to consult with an experienced accountant or CPA to ensure you are getting the most out of your taxes, while being compliant under the current laws. 
Motl Accounting can handle the most complex returns providing you the peace of mind you would want through the experience. If you are looking to prepare your taxes, you can talk to a tax professional at our West Dundee location to get your questions answered and your taxes filed properly.
Contact us at 847-426-2100 or send us message via our Facebook Page to get started today.

Why You Should Separate Your Personal and Business Finances

Why You Should Separate Your Personal and Business Finances

When it comes to running a business, it’s important to keep your personal and business finances separated. This reduces accounting and tax problems and makes it much easier to manage your accounting books. Running a business already takes a great deal of effort, so it helps much to not have additional stress by managing your finances with bookkeeping tools and experts. We understand how important it is to properly manage your finances and the peace of mind that comes with it. We have helped over a hundred businesses with accounting and bookkeeping in the Chicagoland area and have gathered some reasons as to why you should separate personal and business finances to have a better understanding.
  • Establish your business
First off, you will want to ensure that your business is incorporated. Whether you choose to present it as an LLC, C Corp, or S Corp, you will want to ensure that it’s established with the right structure. By establishing a separate legal entity for your business, you will be able to protect your personal assets from your business debts, losses and lawsuits.
  • Acquire business credit
By opening business debit or credit cards, you won’t have to use your personal accounts for business transactions, and it’s the easiest way to keep your personal and business finances separate. In addition, a business credit card can help you build stronger business credit scores and could even boost your borrowing power which could help you qualify for business loans with lower interest rates.
  • Open a business checking account
In addition to credit cards, you also want to open a business checking account and only make purchases for your business through it. Doing so let’s you have a clear and complete picture of your expenditures, which is ideal for when tax time rolls around as all you will have to do is review your statements. 
  • Create a salary for yourself
Seeing as you are the boss of your business, you will want to make it official. So, pay yourself. By creating a salary for yourself, you can write checks from your business checking account which can then be deposited into your personal account. This way, you can easily keep track of your payroll finances and ensure that your salary is being professionally handled as it should be.
  • Keep your receipts
One of the most efficient ways to keep your personal and business expenses separate is by keeping your physical receipts. So pull out those old-fashioned folders and place your receipts within them or upload them digitally. This will help with audits if the IRS ever comes knocking on your door, you can feel confident that you will be prepared.
  • Track your shared expenses
As a business owner, it’s important to keep in mind that many of your business expenses are tax deductible and you will most likely have some expenses to write off! As a result, when you make purchases you will want to ensure that they are separate from your personal ones, which can be done by using your business debit or credit cards. Not only will separating your expenses make things easier for your accountant come tax time, but you will also be protecting yourself by keeping a financial record and continuing to keep receipts.
  • Using personal items for business purposes
When it comes to your business, any expenditure that you can legally write off should be written off to save you money when tax time comes around. By working with a tax advisor, you can determine what’s deductible as well as how to keep the right records. Properly managing your business finances is certainly of importance! These are just a few helpful ways to manage them throughout the year. Hopefully, you now have a better understanding of the complexities that are involved with running a business and managing your books. Working with an accountant can help with your bookkeeping, payroll and taxes and therefore make life and work much easier for you. Looking for an accounting solution that’ll provide you with peace of mind when it comes to your books?  Get in touch with us here at Motl Accounting as we would be ready to assist. Our staff at our West Dundee, IL office assist many small to medium sized businesses and we look forward to assisting you.
Accounting Adjustment Tips during Covid-19

Accounting Adjustment Tips during Covid-19

The spread of the coronavirus clearly had an impact on the general business environment. For many businesses the crisis led to some decline in revenue resulting in making necessary adjustments to navigate the times and not put themselves at risk. While there are revenue opportunities for certain goods and services based on the impact of COVID 19 (i.e. masks), there are also opportunities in business operations. One of the advantages to decreased business activity is companies having time to make operational adjustments like back office accounting. If you are looking to make some changes to your accounting operations, here are some to consider that may help your business emerge from this crisis and any other stronger and better than before.

Get accounting online

Moving your accounting operation online is beneficial to your business, and any small to midsize company or organization should be running their accounting software on desktop or server-based software. Applications such as QuickBooks Online, Intacct, Xero, and others provide full accounting software functionality in a secure environment. We have a client portal for our clients at Motl Accounting which provides access for faster and more convenient communication and document exchange. No software installation on your computer is needed and any user from anywhere in the world can access, which makes it easier for your books to be managed anywhere.

Automate accounting process 

Automating your accounting process eliminates the need for data with sensitive information to travel between systems via paper mail. Most online applications have electronic interfaces to banking systems. This eliminates the need to reconcile paper- based banking statements, as the information from your bank is always seamlessly provided to your online accounting system. These applications also connect to other specialized applications for billing and expensing in many instances, therefore reducing the time and effort required to reconcile through paper documents and manual entries.

Outsource accounting

Outsourcing some or all of your accounting operations is a great way to eliminate costs, decrease risk and free up time for you to focus on your business. Accounting firms are accustomed to cloud accounting and are in many instances more savvy in automating your accounting process. With remote access to software, data and a bookkeeper you will have access to a virtual accounting team that is available to you wherever you are.  Beyond current circumstances, there is a sizable benefit to using an accounting firm like ours. Imagine the freedom to focus on actually running your business, confident that the books are right, having access to all your financials and a team of experts in your corner to help make sound logical financial decisions. This we’ve realized provides business owners and managers with peace of mind. Having the experts handle your bookkeeping, payroll and accounting lets you weather storms better. 

If you are looking to automate and transfer your accounting practices online with a reputable accounting firm, we’d be happy to assist. Our team of accountants, bookkeepers and payroll professionals are ready to help you with your financials during uncertain times like these. Stay safe and connect with us via our website, social pages or call us at 847-426-2100. 

 

5 Ways Accountants Can Help Businesses Grow

5 Ways Accountants Can Help Businesses Grow

Growing as a business is certainly of importance to most business owners. After all, you will want your company to flourish and continue to experience growth for many years to come. However, in order for your business to head in a positive direction, it helps to utilize proper financial planning and analyzing…that’s where an accountant comes into play!

Are you aware of how accountants can benefit your own business? Many might believe an accountant just helps with the crunching of numbers, but you’ll be surprised that great accounting practices actually help businesses grow and generate more profits in the process.

We understand just how beneficial an accountant can be for a business! We have helped several businesses in the Chicagoland area and provided them with great information that’s helped their businesses. That’s why we have gathered five ways in which accountants can help a business grow by working with an accountant like Motl Accounting in Dundee, Illinois. If you would like to discover what these ways are, be sure to continue reading:

  • Creates Budgets & Forecasts Reporting. It’s important that every business has a plan for their future. Therefore, you will want to set up goals to achieve over the next year, as well as create charts and graphs to keep yourself on track and complete them. By working with an accountant, you can have reports created which will showcase how your fixed and variable costs compare with your sales volume throughout the year, providing you with knowledge of the market conditions that you will need for profitable growth.
  • Discovers Key Performance Indicators. Every business has key performance indicators. If you are in retail, you might use inventory turnover for construction or it might be job costing. Your accountant should assist you with discovering yours, as well as advise on methods to set up reports, allowing you to see how they perform over time so that you can make the best decisions for your business for its future growth.
  • Maintains Cash Flow Projections. If there is one thing you want to understand as a business, it’s your cash flow! After all, without cash your business wouldn’t be able to operate at the level you’d want it to. An accountant will create financial reports right out of your accounting software which will assist you with planning your key performance indicators and properly maintaining your cash flow. It’s important to know how to expand your product lines, increase direct costs and add employees in a way that keeps your cash flowing just as it should.
  • Determines Your Businesses Value. It’s important that you know the value of your business so that you can plan for your future. Seeing as opportunities or life events can present themselves at any time, you will want to know how much your business is worth, given the current market conditions. An accountant can assist you with getting to determine your businesses value, so that you can maximize it and your tax liability. We have professionals we partner with at Molt Accounting that help our clients with business valuations. 
  • Creates Advisory Boards. For your business to remain fiscally strong and healthy, you will want to be advised and know what to expect for the years to come. An accountant will work with you to develop a system so that you can forecast budgets, cash flow management and an overall financial analysis for your business. This way you can monitor your goals and business growth through a dashboard and ensure that it is always headed in a positive direction.

These are just a few ways in which an accountant like us can assist your own business with growing.

Are you ready to work with an accountant in the Northwest Suburbs of Chicago to grow your own business and provide your peace of mind in the process? If so, please get in touch with us one of our accounting therapists at Motl Accounting, as we would be pleased with the opportunity to assist you with doing so!

 

When to Hire an Accountant

When to Hire an Accountant

Hiring an accountant is beneficial for any business! Your company will experience different stages of growth and great accountants assist you with staying on track as your business evolves. From creating business plans to handling tax audits, an accountant will be able to guide you through each experience.

Some business owners however avoid outsourcing accounting services, thinking that it will save them money. However, accounting services can actually offer great returns on investments.

If you are curious as to when you should hire your own accountant, you are in luck! Here at Motl Accounting, we have comprised some great insights for you. If you would like to learn more, be sure to continue reading:

  • Are You Ready to Boost Your Income? If you are ready to increase your income, it’s time to hire an accountant. All businesses rely on a steady cash flow and by hiring an accountant, you can help your business optimize and regularize a revenue stream. They will oversee your accounts receivable, improve debt collection and advise on wise investments. In addition, an accountant can also review market rates for your products or services, so that your prices are adjusted accordingly, allowing you to maximize your income.
  • Are You Ready to Save Time? As a business professional, you are busy! If you are ready to save some time, turn your accounting needs over to an accountant. You have enough on your plate and shouldn’t have to worry about taxes, compliance, bookkeeping or payroll. By hiring an accountant, all of this weight will be taken off your shoulders and will be handled by the professionals.
  • Are You Ready to Prepare Your Taxes? Taxes are a daunting subject for any business. If you are aren’t ready to handle yours, it’s time to seek the services of an accountant. From quarterly payments to annual filings, your accountant should ensure that your business taxes are handled properly, giving you peace of mind. After all, you wouldn’t want to put yourself at risk of an audit.
  • Are You Ready to Create Forecasts? As a business owner, you want to make sure that your finances stay on track as your business grows. It may be time for you to sit down with an accountant to create the right plans for your business. Whether you are preparing to impress an investor or needing to hire more staff, your accountant can create models and projections to assist you with making the right decisions for the upcoming months and years.

As you can see, an accountant is a wonderful asset to a business! We have helped many businesses with all these insights and more.  These are just a few things that you should keep in mind if you are considering hiring your own accountant.

If you are all set to begin working with your own accountant, contact us here at Motl Accounting. Our goal is to ensure that our clients have peace of mind, when it comes to their accounting. We would be honored to work with you and assist you with our accounting services in Dundee, Illinois.